The Economic Survey was prepared by the State Planning Commission.
This growth number comes on the back of a solid foundation built by pursuing inclusive policies. The performance must be read in the context of a 3.33 per cent real growth rate registered by the global economy. India’s economy recorded 7.61% growth in 2022-23, 9.19% in 2023-24, and 6.48% in 2024-25.
With just 4% of the country’s land area and 6% of the nation’s population, Tamil Nadu contributed 9.21% to the national GDP (gross domestic product) in 2023-24. Its Gross State Domestic Product (GSDP), at current prices, reached ₹27.22 lakh crore in 2023-24, posting a nominal growth rate of 13.71% and a real growth rate of 8.33%, the Survey said.
According to the Survey, a kind of a report card on performance, Tamil Nadu’s per capita income was ₹2.78 lakh in 2022-23, which is1.6 times the national average of ₹1.69 lakh.”It has consistently outpaced the national average over the years. This makes Tamil Nadu the fourth-largest state in per capita income,” it said.
Distributed development
Significantly enough, the Survey found that the economic development in Tamil Nadu “is more evenly distributed across multiple urban centres. Cities like Coimbatore, Madurai, Tirupur, Tiruchirappalli, and Salem contribute significantly to the state’s economy, helping bridge the urban-rural divide”.
The services sector is a major contributor. In 2023-24, the services (tertiary) sector contributed 53.63% of the state’s Gross State Value Added (GSVA), followed by the secondary sector (33.37%) and the primary sector (13%).
$1 trillion by 2030
Tamil Nadu is aiming to become a $1 trillion economy by 2030. “With its existing strengths, Tamil Nadu shall accomplish this feat through strategic planning to address challenges like climate change, demographic shifts, technological disruptions, and changing employment landscapes,” the Survey said. If the State were to hit the $1 trillion target, it had to focus on developing rural entrepreneurship to spread growth across all the districts of the state. Further, the state should leverage its demographic advantage by increasing the skill endowment of the youth, encouraging women to participate in the workforce, and promoting high-value manufacturing and services, including frontier technologies.
“It is heartening to note that Tamil Nadu has already started on this growth path with policies for the semiconductor and advanced electronics industry, creating a business environment to expand sectors like electronics, IT and ITeS, logistics, and renewable energy”, the Survey said.
Lowest retail inflation
While the state’s average inflation rate was 5.7% between 2019-20 and 2023-24 — higher than India’s average of 4.85%, this trend reversed in 2021-22, with Tamil Nadu’s retail inflation dropping significantly. In 2023-24, Tamil Nadu recorded the 8th lowest retail inflation among 20 major Indian states. According to the Survey, the urban inflation in Tamil Nadu decreased from 6% in 2019-20 to 4.5% in 2024-25 (till Jan 2025). However, the rural inflation remained at 5.4% “While inflation is largely a monetary phenomenon, its impact on people is real,as it erodes their purchasing power. The Tamil Nadu government intervenes to limit this erosion through mechanisms like subsidized supplies of select cereals, pulses, and edible oil, electricity, and income support schemes such as the Kalaignar Mahalir Urimai Thittam,” the Survey said.
Leads the race
“Tamil Nadu is contributing 11.90% to India’s manufacturing GDP and leading the country in the number of factories. With 35.56 lakh Udyam-registered Micro, Small, and Medium Enterprises (MSMEs), the state ranked second nationally in 2023-24. It hosts over 1,500 automobile and auto component factories while also excelling in textiles, leather and electronics manufacturing,” the Survey said.
Tamil Nadu ranks first in motor vehicle production, apparel and leather goods and second in textiles, machinery and electronics. It is also a top exporter of engineering goods, electronics, garments, cotton yarn and leather products. In 2023-24, 33.31 per cent of the state’s workforce was engaged in industrial activities, with 15.97 per cent in manufacturing and 17.2 per cent in construction. The manufacturing sector grew at 8.33 per cent between 2021-22 and 2023-24, while construction expanded by 9.03 per cent, driven by double-digit growth in transport equipment, rubber and plastic products and chemicals.
Key driver
Tamil Nadu’s service sector is a key driver of economic growth, spanning industries such as IT and IT-enabled services, finance, healthcare, education, tourism, hospitality and entertainment. Rapid urbanisation has fuelled demand for essential infrastructure services, including transportation, housing and utilities.
In 2023-24, 54.63 per cent of the state’s urban workforce was employed in the service sector, nearing the national average of 58.07 per cent. Key employment areas included trade and motor vehicle repair (16.28 per cent), transport and storage (7.53 per cent), information and communication (6.28 per cent), education (5 per cent), accommodation and food services (4.86 per cent), financial and insurance services (2.84 per cent) and other services (11.84 per cent).
Tamil Nadu’s service sector has rebounded strongly post-pandemic, growing at 7.97 per cent between 2021-22 and 2023-24. The expansion was led by real estate (9.41 per cent), trade, repair, hotels and restaurants (7.98 per cent), and transport and storage (7.67 per cent).
Social sector thrust
The Tamil Nadu government, according to the Survey, has steadily increased its social sector expenditure, which rose from ₹79,859 crore in 2019-20 to ₹1.16 lakh crore in 2023-24. “Key initiatives include the Chief Minister’s Breakfast Scheme to improve school attendance and nutrition as well as various programmes empowering women, such as the Kalaignar Mahalir Urimai Thittam and the Mahalir Vidiyal Payanam Thittam,” the Survey said.
Between 2005-06 and 2022-23, Tamil Nadu’s poverty rate (Headcount Ratio) decreased significantly, from 36.54% to just 1.43%, while India’s HCR declined from 55.34% to 11.28%. In 2023-24, Tamil Nadu ranked fourth among major states in terms of average monthly per capita consumption expenditure for both rural and urban areas, consistent with its position as the fourth highest in annual per capita income.